Gas gusher: the nation is awash in natural gas, driving down prices and giving the economy a boost.

• Author: Andersen, Glen
• Position: ENERGY - Cover story

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What a difference a few years can make.

Not long ago, high natural gas prices and tight supplies drove the construction of numerous liquefied natural gas terminals to handle imported fuel. Now, these terminals are seen as a means to export a newfound wealth of natural gas.

Innovative drilling technologies are providing the nation with an astounding increase in energy resources, driving economic development and lowering energy costs for industries, businesses and consumers across the nation.

"The long-term vision for natural gas resources is extremely positive," says Christopher McGill from the American Gas Association.

New technology has vastly expanded the amount of natural gas the industry thinks can be recovered, increasing from an estimated 1,200 trillion cubic feet in 1990 to current estimates of about 2,170 trillion cubic feet. The change is "due primarily to changes in the economics of natural gas development and extraction technologies," McGill says.

The refinement of hydraulic fracturing as a method to extract natural gas from shale is a key reason for this boom, although it brings with it environmental concerns and challenges.

Abundant supply has driven natural gas prices to nearly $2.50 per million Btu. Just a few years ago, prices hovered above $9, even hitting a high of $14 for a short time in 2008. At that time, electricity suppliers were concerned about the volatility of gas prices. Many turned to less expensive, more predictable options, such as coal.

Now, with natural gas flooding the market, the U.S. Energy Information Administration forecasts low prices for the next few decades, with enough domestic supply to last about 90 years at current consumption levels.

The nation currently uses about 24 trillion cubic feet of natural gas a year, mainly for electric generation, and use in homes and businesses.

Shale gas--natural gas extracted from shale rock formations--now makes up nearly a quarter of all U.S. natural gas produced and is expected to contribute about half the production by 2035. That will more than compensate for the decline of natural gas produced from traditional drilling.

Hydraulic fracturing has changed the game so much that the Energy Information Administration expects supplies to grow faster than demand over the next 20 years, allowing the United States to become an overall net exporter of natural gas by 2021, though others question that estimate.

Starting in the 1970s, the nation began...